An India Shareholders` Agreement clarifies the authority and image of a shareholder and the license you hold as an issuer of such shares by characterizing the power and risks for all. In addition, it mediates as governor of the interaction between small and large shareholders. Their original price includes two iteration rounds. Therefore, if you need changes to the format of the shareholders` agreement, our lawyers will do what is necessary and send it to you for further approval. This organization is made up of experienced lawyers who use their expertise to establish your shareholder`s agreement that covers all legal requirements and the needs of the parties. The experience and knowledge available to our professionals can help you include clauses in the agreement that effectively describe the relationship between the parties and the company and avoid confusion or difficulties in the future. 19. This Agreement constitutes the entire agreement between the Parties on the subject matter of the Contract and supersedes all prior agreements, arrangements or understandings, if any, oral or written, between the Parties on the subject matter of this Agreement. While Indian case law recognizes that the right to transfer shares is linked to the ownership of shares (limited by reasonable restrictions)1, an absolute limitation of the rights to transfer shares is not valid and binding.
Judgments such as Mafatlal Industries2 and V.B. Rangaraj3 decided, under the old regime of the Companies Act of 1956, that share transfer rights should be included in the AoA in order to have the inviolability of the third-party effectiveness of the provisions. In judgment V.B. Rangaraj of 1992, the parties introduced certain restrictions on the transfer of shares in the SHA, which required them to offer shares to the other party before offering them to a foreigner. However, as the pre-emption clause was not included in the AoA, the parties eventually reached a point where the applicability of the limitation on the transfer of shares was called into question. The Tribunal, which relied on section 3(iii) and section 82 of the Companies Act 1956, held that “AoAs are the rules of the enterprise and are binding on the company and its shareholders. Consequently, the only limitation on the transfer of shares in a company is set out in its articles of association where a restriction which is not provided for in the articles of association is not binding either on the company or on the shareholders. The shareholders` agreement generally consists of provisions relating to the rights of the shareholder with regard to the following issues: Shareholders can continue to obtain the most appropriate source of funding, whenever they consider that it is beneficial for the company. The draft shareholders` agreement contains the procedure for obtaining such finances. A shareholders` agreement is a contract between the company and its shareholders. It describes the rights, obligations of shareholders and provisions relating to the management and authorities of the company.
The agreement aims to protect the interests of shareholders; in particular minority shareholders, i.e. those who hold less than 50% of the company`s shares. . . .